CORPORATE PRESENTATION AUGUST 2021 - TSX: BNE - Bonterra Energy Corp.
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CORPORATE PRESENTATION
TSX: BNE
AUGUST 2021
1
Corporate Snapshot
Financial TSX: BNE
Common Shares Outstanding 33.7 million
Insider Ownership 15%
Tax Pools at June 30, 2021 $444 million
Tax Horizon ~2023
Q2 2021 Net Debt $319 million
Bank Line $265 million
Drawn $244 million at Q2 2021
Operational
Oil and Liquids Production Weighting 67%
Natural Gas Production Weighting 35%
Average Corporate Production Decline Rate ~19.5%
Reserve Life Index (PDP) 9 years
Reserve Life Index (1P) 20 years
Reserve Life Index (2P) 24 years
2
Focused on Free Funds Flow Generation
Bonterra’s focus will remain on generating strong, sustainable, free funds flow which can
be directed to debt reduction and capital spending when supported by commodity prices
DISCRETIONARY As debt is reduced, focus on generating long-term,
CAPITAL sustainable value
ALLOCATION
DEBT Excess free cash flow will be directed to
reduce debt
REPAYMENT
Low corporate decline rate ensures
FREE CASH FLOW minimal capital required to sustain
GENERATION production, which supports
maximizing free cash flow
3
Forecast Activity Levels 2021-2022
Focused on accelerated value creation by deploying $70 - $75 Million to Bonterra’s drilling
program and abandonment initiatives
PLANNED DRILL PROGRAM (1) PLANNED ABANDONMENT PROGRAM (1)
36
Net Well Count (On Production) Net Well Count (Abandoned)
16 90
14 80
70 84
12 14
60 67
10
50
8 10 10 53
40
6 8 46
30
4 6 6 6 20
35
27
2 10 17
0
2 0
9
30%
Production growth forecast
60%
Inactive well count reduction forecast
supported in part by deployment of BDC term debt by end of Q1 2022, supported in part by Alberta’s
Site Rehabilitation Program
(1) 2022 plans are preliminary in nature and do not reflect board approved guidance 4
Forecast Production
Ramping production into constructive pricing to generate significant free funds flow
(1)
SHUT IN PRODUCTION
2020 CAPEX SUSPENDED $45 MILLION
BDC FINANCING DEPLOYED
(1) 2022 plans are preliminary in nature and do not reflect board approved guidance 52021 - 2022 Funds Flow Analysis
Positioned to generate significant free funds flow while meaningfully deleveraging over the
next two years
YEAR 2021
ESTIMATED PRODUCTION boe/d 12,800
OIL & LIQUID RATIO % 66%
PRICE SCENARIO STRIP $60 WTI 65 WTI 70 WTI 75 WTI
AVERAGE ANNUAL BNE REALIZED PRICE $/bbl 74.18 65.50 71.75 78.00 84.25
FUNDS FLOW MM$C 106 88 99 109 119
CAPEX Inc. ABANDONMENTS MM$C (79) (79) (79) (79) (79)
FREE FUNDS FLOW MM$C 26 9 19 30 40
DEBT/CASH FLOW ratio 2.69 3.41 2.95 2.57 2.28
YEAR 2022
ESTIMATED PRODUCTION boe/d 13,500
OIL & LIQUID RATIO % 67%
PRICE SCENARIO STRIP $60 WTI 65 WTI 70 WTI 75 WTI
AVERAGE ANNUAL BNE REALIZED PRICE $/bbl 73.03 65.50 71.75 78.00 84.25
FUNDS FLOW MM$C 145 123 139 152 164
CAPEX Inc. ABANDONMENTS MM$C (47) (46) (47) (50) (50)
FREE FUNDS FLOW MM$C 98 77 92 102 114
DEBT/CASH FLOW ratio 1.28 1.82 1.44 1.17 0.96
(1) Price Assumptions: Edmonton light differential: -U$5.00; FX: 0.80 CAD/US; Quality adjustment -C$3.25/bbl; BNE Realized Gas $3.00/mcf; BNE Realized Liquids:
58% of realized oil
(2) 2022 plans are preliminary in nature and do not reflect board approved guidance 6Free Funds Flow Sensitivity 2021 - 2022
Bonterra’s asset base generates significant free funds flow
(3)
FREE FUNDS FLOW HEDGE LOSS
$120
$114
$100
$102
$98
FREE FUNDS FLOW (MM$C)
$92
$80
$36 $77
$60
$31
$40 $22
$25
$40
$20 $30
$20 $26
$19
$9
$0
STRIP $60 $65 $70 $75 STRIP $60 $65 $70 $75
2021 2022
(1) Price Assumptions: Edmonton light differential: -U$5.00; FX: 0.80 CAD/US; Quality adjustment -C$3.25/bbl; BNE Realized Gas $3.00/mcf; BNE Realized Liquids:
58% of realized oil
(2) 2022 plans are preliminary in nature and do not reflect board approved guidance
(3) 30% of Pre-Royalty volumes hedged as per bank covenant 7Forecast – Debt Structure and Price Sensitivity
Significant torque to oil prices amplifies efforts to deleverage when combined with increasing production
Bank Debt BDC Debt Sub Debt D/CF
$350 7.0
$300 6.0
$20
$20 $20
$46 $20
$46 $20
$250 $46 $46 5.0
$46
$236 $20
DEBT/CASH FLOW
$219 $225
DEBT (MM$C)
$200 $215 4.0
$205 $45 $20
$20
$45 $20
$150 3.4 $45 $20 3.0
$160 $45
2.9 $45
2.7 $135
2.6 $122
$100 $114 2.0
2.3
1.8 $92
$50 1.4 1.0
1.3 1.2
1.0
$0 -
STRIP $60 $65 $70 $75 STRIP $60 $65 $70 $75
2021 2022
(1) Price Assumptions: Edmonton light differential: -U$5.00; FX: 0.80 CAD/US; Quality adjustment -C$3.25/bbl; BNE Realized Gas $3.00/mcf; BNE Realized Liquids:
58% of realized oil
(2) 2022 plans are preliminary in nature and do not reflect board approved guidance 8Deep Drilling Inventory
Concentrated assets in the Pembina Cardium oil pool support efficient operations and offer exposure
to significant upside through a large inventory of low-risk, highly economic undrilled locations
Pembina & Willesden Green
Lands by the Numbers1
Cynthia
West
Pembina
Keystone 473 gross
Sections of land (312 net)
Carnwood
92%
Operated Production
Blue Rose
Rapids Creek 93.9 MBOE
P+P Reserves
294 net
Booked locations
Willesden Green 700+ net
Internally identified multi-
zone locations
24 years
Reserve Life Index (P+P)
Ferrier
(1) See “Drilling Locations” located in the advisories of this presentation 9Pembina Cardium Features
Original-Oil-in-Place per Section Recovery Factor
0 to 5,000 Mbbl 0%
5,000 to 10,000 Mbbl 5%
10,000 to 20,000 Mbbl 10%
20,000 to 25,000 Mbbl 15%
25,000+ Mbbl 20%
25%
• Pembina is the largest conventional oilfield in Canada with large oil-in-place and low recovery
to date, offering long-term stable production, high-quality oil and attractive netbacks
• Majority of Bonterra land covers areas with significant remaining original-oil-in-place
• Opportunity to increase recovery factors can contribute to sizable increases in reserves and
production
10Pembina Cardium Geology
Shale
Conglomerate
Sandstone
Bioturbated
Mudstone
Sandstone
Shale
• Interbedded sandstone and shale with local conglomerate and prevalent underlying low
permeability bioturbated mudstone
• Depths range from 1,200m TVD in NE Pembina to 2,000m TVD in SW Pembina
11Average BNE Cardium Economics
Cardium wells are repeatable, predictable and generate strong returns
200
Reserves per well (MBOE) 140
150
IP (12 months) (boe/d) 110
BOE/D
100
50
0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
BNE Type Curve: Full Cycle Capital and Price Sensitivities
WTI $USD/bbl $ 60.00 $ 65.00 $ 70.00 $ 75.00
BNE Realized Price (1,2) $CAD/bbl $ 65.50 $ 71.75 $ 78.00 $ 84.25
DCET(3) M$C $ 1,900 $ 2,000 $ 2,100 $ 2,100
BT Payout Years 1.2 1.1 1.0 0.9
Rate of Return % 84% 95% 107% 135%
BT NPV10 M$C $ 1,544 $ 1,760 $ 1,988 $ 2,276
Recycle Ratio 2.3 2.4 2.5 2.7
(1) Realized Oil Price calculated as follows: (WTI Oil Price – Differential) x FX rate – (Quality Adjustment)
(2) Assumptions: Edmonton light differential: -U$5.00; FX: 0.80 CAD/US; Quality adjustment -C$3.25/bbl; BNE Realized Gas $3.00/mmBtu; BNE Realized Liquids: 58% of realized oil
(3) Drill, Complete, Equip, Tie-In & Facilities
12Our Responsibility – Environmental, Social and Governance
HEALTH, SAFETY AND ENVIRONMENT (HS&E)
• Apply minimal disturbance drilling techniques to reduce the overall impact to the environment
• 99% routine gas conservation
• Fugitive emission leak detection program in place to identify leaks or unintended release of gases with testing completed on 100%
of facilities
• Installation of vapor recovery units since 2015 to eliminate emissions from tank farms
• Provide timely and effective responses to any incidents that may occur, enabling rapid recoveries and conducting thorough incident
investigations - over 90% of spills are identified in less than 12 hours and with adverse impact or no claims through insurance
• Employ a vigorous asset integrity program to ensure the safe operation of our assets – 100% visual review of all pipelines along
with scheduled annual testing of 100% of high risk/high consequence pipelines
SOCIAL RESPONSIBILITY
• Consult with internal and external stakeholders who are impacted by our operations and remain committed to working with
involved parties to resolve any concerns or questions that may arise
• Winner of 2020 Pro-Local Award as a Company that has proven for years that it cares and supports Drayton Valley with support of
local oil field services
• Member of Explorers and Producers Association of Canada (EPAC) supporting Canada’s conventional energy producers and industry
employees across Western Canada
PRIORITIZING CORPORATE GOVERNANCE
• Refreshed Board including new members, Ms. McDonald, Ms. Ricci, Mr. Campbell and Mr. Stewart with complementary
backgrounds
• Diverse board membership
• All Board committees (Audit; Policy, Governance, Nominations; Compensation; Reserves) are 100% independent
• Our governance policies include written documents such as a Code of Conduct, Staff Disclosure Policy, and a Whistleblower Policy
13Strategy: Positioned for Success
Our proven track record has been built on a model of generating long-term, sustainable value
through disciplined capital allocation aligned with prevailing commodity prices
Insiders own ~15%
Experienced
& Aligned
Management
Low Industry low ~19.5% decline
Corporate
Decline Rate
Shareholder
Value
Creation
Reducing Corporate strategy of allocating all
Debt free cash flow to debt repayment
Low-Risk
Drilling
Inventory 700+ net locations identified, 296
Net locations booked
14Appendix
15Risk Management / Hedge Strategy
WTI CRUDE OIL HEDGE HEDGE STRATEGY
PERIOD INSTRUMENT CURRENCY VOLUME (bbl) FLOOR ($/bbl) CEILING ($/bbl)
JUN 2021 - DEC 2021 COSTLESS COLLAR USD 2,250 $36.67 $48.71
Target to hedge 30% of pre-royalty volumes
JAN 2022 - MAR 2022 COSTLESS COLLAR USD 2,000 $48.00 $66.14 Fulfill bank hedge covenant
APR 2022 - JUNE 2022 COSTLESS COLLAR USD 500 $48.00 $74.42 Protect Bonterra cash costs
MSW OIL DIFFERENTIAL HEDGE
Protect free funds flow
PERIOD INSTRUMENT CURRENCY VOLUME (bbl) PRICE ($/bbl)
JUN 2021 - DEC 2021 FIXED CAD 2,000 -$7.45
JAN 2022 - MAR 2022 FIXED CAD 1250 -$6.28
APR 2022 - JUN 2022 FIXED CAD 1,000 -$6.55
APR 2022 - JUN 2022 FIXED USD 800 -$5.06
AECO NATURAL GAS HEDGE
PERIOD INSTRUMENT CURRENCY VOLUME (gj) PRICE ($/gj)
JUN 2021 - OCT 2021 FIXED CAD 7,300 $2.54
NOV 2021 - DEC 2021 FIXED CAD 7,300 $2.40
JAN 2022 - MAR 2022 FIXED CAD 7,500 $2.84
APR 2022 - JUN 2022 FIXED CAD 2,000 $2.40
PERIOD INSTRUMENT CURRENCY VOLUME (gj) FLOOR ($/gj) CEILING ($/gj)
APR 2022 - JUN 2022 COSTLESS COLLAR CAD 5,000 $2.00 $2.60
JUL 2022 - SEP 2021 COSTLESS COLLAR CAD 5,000 $2.50 $3.15
16Reserves Summary – December 31, 2020
NPV BT 10% (1)
Reserve Category Oil (Mbbl) BOE (Mboe)
(millions)
Proved Developed Producing 18,442 33,243 401,988
Proved Developed Non-Producing 1,748 2,571 21,224
Proved Undeveloped 22,877 39,505 219,293
Total Proved 43,067 75,319 642,505
Proved + Probable Developed Producing 22,587 40,790 460,647
Proved + Probable Developed Non- Producing 2,119 3,129 23,957
Proved + Probable Undeveloped 29,024 49,991 382,364
Total Proved + Probable 53,729 93,910 866,967
(1) Sproule Pricing at Dec 31, 2020 (https://sproule.com/price-forecast/forecast-archive/)
17Forward Looking Information
Certain statements contained in this Presentation include statements which contain words such as “anticipate”, “could”, “should”, “expect”, “seek”, “may”,
“intend”, “likely”, “will”, “believe” and similar expressions, statements relating to matters that are not historical facts, and such statements of our beliefs,
intentions and expectations about development, results and events which will or may occur in the future, constitute “forward-looking information” within the
meaning of applicable Canadian securities legislation and are based on certain assumptions and analysis made by us derived from our experience and
perceptions. Forward-looking information in this Presentation includes, but is not limited to: expected cash provided by continuing operations; future capital
expenditures, including the amount and nature thereof; oil and natural gas prices and demand; expansion and other development trends of the oil and gas
industry; business strategy and outlook; expansion and growth of our combined business and operations; and maintenance of existing supplier and partner
relationships; supply channels; accounting policies; credit risks; and other such matters. Forward-looking information in this Presentation also includes, but is not
limited to, the timing and amount of future dividend payments by Bonterra.
All such forward-looking information is based on certain assumptions and analyses made by us in light of our experience and perception of historical trends,
current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. The risks, uncertainties, and
assumptions are difficult to predict and may affect operations, and may include, without limitation: foreign exchange fluctuations; equipment and labour
shortages and inflationary costs; general economic conditions; industry conditions; changes in applicable environmental, taxation and other laws and regulations
as well as how such laws and regulations are interpreted and enforced; the ability of oil and natural gas companies to raise capital; the effect of weather
conditions on operations and facilities; the existence of operating risks; volatility of oil and natural gas prices; oil and gas product supply and demand; risks
inherent in the ability to generate sufficient cash flow from operations to meet current and future obligations; increased competition; stock market volatility;
opportunities available to or pursued by us; and other factors, many of which are beyond our control. The foregoing factors are not exhaustive.
Actual results, performance or achievements could differ materially from those expressed in, or implied by, this forward-looking information and, accordingly, no
assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur, or if any of them do so, what benefits will be
derived there from. Except as required by law, Bonterra disclaims any intention or obligation to update or revise any forward-looking information, whether as a
result of new information, future events or otherwise.
The term barrels of oil equivalent (BOE) may be misleading, particularly if used in isolation. A BOE conversion ratio of six thousand cubic feet per barrel
(6mcf/bbl) of natural gas to barrels of oil equivalence is based on an energy equivalency conversion method primarily applicable at the burner tip and does not
represent a value equivalency at the wellhead. All BOE conversions in the report are derived from converting gas to oil in the ratio mix of six thousand cubic feet
of gas to one barrel of oil.
The forward-looking information contained herein is expressly qualified by this cautionary statement.
18Forward Looking Information
DRILLING LOCATIONS:
This presentation discloses drilling locations in three categories: (i) proved locations; (ii) probable locations; and (iii) unbooked locations. Proved locations and
probable locations, which are sometimes collectively referred to as “booked locations”, are derived from the Company’s most recent independent reserves evaluation
as prepared by Sproule as of December 31, 2020 and account for drilling locations that have associated proved or probable reserves, as applicable. Unbooked
locations are internal estimates based on the Company’s prospective acreage and an assumption as to the number of wells that can be drilled per section based on
industry practice and internal review. Unbooked locations do not have attributed reserves or resources. Of the 700+ Net drilling locations identified herein, 276 are
net proved locations, 20 are net probable locations and 400+ are net unbooked locations. Unbooked locations have specifically been identified by management as an
estimation of our multi-year drilling activities based on evaluation of applicable geologic, seismic, and engineering, production and reserves data on prospective
acreage and geologic formations. There is no certainty that we will drill all unbooked drilling locations and if drilled there is no certainty that such locations will result
in additional oil and gas reserves, resources or production. The locations that Bonterra drills will ultimately depend upon the availability of capital, regulatory
approvals, seasonal restrictions, oil and natural gas prices, costs, actual drilling results and other factors. While certain of the unbooked drilling locations have been
derisked by drilling existing wells in relative close proximity to such unbooked drilling locations, the majority of other unbooked drilling locations are farther away from
existing wells where management has less information about the characteristics of the reservoir and therefore there is more uncertainty whether wells will be drilled
in such locations and if drilled there is more uncertainty that such wells will result in additional oil and gas reserves, resources or production.
STRIP PRICE DECK – AUG 4, 2021:
Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 2021 2022
Crude Oil - WTI USD/bbl $52.10 $59.06 $62.36 $61.70 $65.16 $71.35 $72.43 $70.63 $70.63 $70.09 $69.50 $68.85 $66.16 $65.38
Differential USD/bbl -$5.78 -$5.68 -$4.26 -$2.34 -$3.11 -$3.89 -$4.73 -$3.41 -$4.20 -$4.20 -$4.25 -$4.30 -$4.18 -$4.45
Exchange CAD/USD $0.79 $0.79 $0.80 $0.80 $0.82 $0.82 $0.80 $0.80 $0.80 $0.80 $0.80 $0.80 $0.800 $0.799
Quality Adjustment CAD/bbl -$3.25 -$3.25 -$3.25 -$3.25 -$3.25 -$3.25 -$3.25 -$3.25 -$3.25 -$3.25 -$3.25 -$3.25 -$3.25 -$3.25
Bonterra Realized Oil CAD/bbl $55.69 $64.53 $69.78 $70.91 $71.99 $79.20 $81.53 $80.91 $79.92 $79.24 $78.44 $77.57 $74.14 $73.03
AECO Gas $/gj $2.60 $3.77 $2.58 $2.65 $2.93 $3.22 $3.74 $3.24 $3.53 $3.81 $4.04 $4.12 $3.35 $3.27
19Corporate Information
OFFICERS BANKS
George F. Fink CIBC
CEO National Bank of Canada
Robb D. Thompson The Toronto Dominion Bank
CFO & Corporate Secretary
Alberta Treasury Branches
Adrian Neumann
Business Development Bank of Canada
COO
Export Development Canada
Brad A. Curtis
Senior VP, Business Development
INDEPENDENT RESERVE ENGINEER
Sproule Associates Limited
DIRECTORS
Michael Stewart (Chair of the Board) LEGAL COUNSEL
George F. Fink Borden Ladner Gervais LLP
Jacqueline R. Ricci
Jay J. Campbell AUDITORS
Rodger A. Tourigny Deloitte LLP
Stacey McDonald
REGISTRAR & TRANSFER AGENT
Odyssey Trust Company of Canada
HEAD OFFICE
Bonterra Energy Corp. STOCK EXCHANGE LISTING
Suite 901, 1015 – 4th St SW TSX: BNE
Calgary, AB T2R 1J4
Phone: 403.262.5307
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